Market Review: Why Stocks Gained Big Last Week

The market opened the week on Tuesday with sharp gains (356bps), it highest single day gain in several weeks. This was driven by a knee-jerk reaction from investors to the MSCI’s decision to keep Nigeria in its frontier market index. The index provider however stated that it would place Nigeria under “special treatment” and some individual stocks that no longer meet its criteria would be deleted from the index. The week ended with the All-Share Index climbing 255bps WoW, to close at 25,701.60pts

The gains came in from the Industrials, which was higher by 333bps, largely on the back of gains in DANGCEM (+282bps) and a moderate recovery in WAPCO (+516bps). The Consumers climbed 329bps on gains in NESTLE (+1215bps), Its strong Q1 numbers gave the stock a boost, as traders placed huge bets on the stock. A closer detailed look at the numbers showed that performance was largely due to a base effect given the weak level of activity in Q1’2015 due to the elections. The Banks and Oils were also higher by 246bps and 166bps respectively, on sustained gains in the tier 1 banks and a retracement in FO, after hitting its lowest level since Aug 2015.

The week saw a turnover of 0.91bn shares valued at N6.41bn, less than the 1.21bn shares valued at N7.11bn that traded in the previous week. This was largely due to the shorter trading week. Notably, the daily average turnover of N1.60bn was c.12% higher WoW. The activity was mainly in the shares of NESTLE, ZENITHBA, FBNH & NB. Again as in the previous week, participation was fairly mixed with both local and foreign investors taking a dip into the market.